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Capex: We
reported last January that according to Thomson Reuters data, big companies
around the world held almost $7tn of cash and equivalents on their balance
sheets at the end of 2013 - - more than twice the level of 10 years ago. Weak
non-residential business investment is reflected in recent data that the
average age of US industrial equipment at over 10 years is at the highest level
since 1938.

A Morgan Stanley research note says that the need
for renewed business equipment investment is reflected in the current state of
the capital stock.

"By 2012, and after having fallen to a 12-year
low in 2000, the
average age of industrial equipment shot up to the highest level since 1938. As
equipment ages, the rising costs of maintaining the current capital stock should
propel spending on business equipment as firms are forced to replace old,
retired equipment. Yet replacement alone would result in no net growth in
the capital stock. For increased business investment to truly propel the
economy, businesses must spend above and beyond simple replacement rates."

The research note
says that since the beginning of 2010, when nonresidential structures investment
started to recover after the recession, over 80% of the recovery has been due to
investment in drilling and mining industries.
These areas now total nearly one-third of overall structures investment.

Technology investment appears to be on a positive
trajectory, but remains limited by a recent slowdown in the pace of
technological progress as productivity has slowed. "What's more, direct
technology spending is a very small share of total GDP so gains will contribute
in only a small way to overall growth. Investment in technology appears to have
been much more resilient in the aftermath of the recession relative to non-tech
investment."